EconPapers    
Economics at your fingertips  
 

Assessing the Benefits of Long-Run Weather Forecasting for the Rural Poor: Farmer Investments and Worker Migration in a Dynamic Equilibrium Model

Mark Rosenzweig and Christopher Udry

No 25894, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: The livelihoods of the majority of the world's poor depend on agriculture. They face substantial risk from fluctuations in weather conditions. Better risk, credit and savings markets can improve productivity and welfare in rural areas but entail high administrative costs. We consider a classic public good with benefits that theoretically exceed those of perfect insurance contracts – improving the skill of long-run weather forecasts. We use an equilibrium model of agricultural production and labor migration, and a variety of Indian panel datasets to assess quantitatively the effects of improvements in seasonal forecasts of monsoon weather. We find that in areas where the forecast is accurate (has “skill”) that investment, migration and rural wages respond to forecasts. We calculate that if such skill were pervasive across India, the total value of an accurate forecast for farmers and wage workers is in the tens of billions of rupees.

JEL-codes: O1 Q12 (search for similar items in EconPapers)
Date: 2019-05
New Economics Papers: this item is included in nep-agr and nep-mig
Note: DEV
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

Downloads: (external link)
http://www.nber.org/papers/w25894.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:25894

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w25894

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().

 
Page updated 2025-03-22
Handle: RePEc:nbr:nberwo:25894